News Analysis |
Chief Justice of Pakistan (CJP) Saqib Nisar ordered to place the names of Pakistan International Airlines’s (PIA) managing directors (MD’s), who served from 2008 to 2018, on the Exit Control List (ECL).
CJP condemned the PIA management and referring to its managing directors of last decade, he said, “You all destroyed such a large asset.This is gross injustice with the national carrier. Those [Management] who destroyed PIA are enemies and traitors.” A three-member bench Apex Court of Pakistan headed by the CJP Mian Saqib Nisar is hearing a Suo Moto case of national carrier regarding its privatization and audit.
The government had initiated the process under PIAC Conversion Act 2016 which was adopted unanimously by the parliament, and it was supposed to complete the privatization process by April 15 this year.
Supreme Court has taken notice on an application for granting the most profitable routes of PIA to other airlines and intended privatization of the Corporation, which the opposition has opposed vigorously. There are allegations that Air blue was awarded the lucrative routes from PIA. The idea looked suspicious since the details are proposed when the government is nearing the end of its term and the future looks uncertain for the ruling party.
On April 1, after taking notice of the application filed in the apex court, a two-member bench headed by CJP Saqib Nisar, including Justice Faisal Arab had issued a notice to the Federal government, PIA chief and ministry of defense to respond to allegations pitted against the current regime, pertaining to awarding routes to other airlines and process of privatization of PIA.
Read more: Is Chief Justice Saqib Nisar apolitical?
Before, making this order, while hearing the proceedings on death of children in Tharparkar, CJP had commented that he does not intend to interfere in the work of the executive and provincial governments but is compelled to do so due to the appalling state of institutions. On April 6, PIA MD was directed to submit audited statements of accounts before the court in the next hearing.
Supreme Court had ordered all MD’s PIA who have served in the past ten years to appear before the court on April 12. Before the case hearing started today, the PIA’s counsel presented a 9-year audit record and briefed the court that the national carrier’s shares are being currently traded at Rs 5. Moreover, details of the loss borne by the company were also discussed in today’s proceedings.
Supreme Court has taken notice on an application for granting the most profitable routes of PIA to other airlines and intended privatization of the Corporation, which the opposition has opposed vigorously.
PIA remained in losses for a prolonged period of time. In all fields including operations, finance, planning, engineering, and passenger services, it showed below-par results.
The airline has been losing billions of rupees per month and is increasingly facing a daunting competition from foreign competitors. Under tough competition from cash-rich foreign competitors like (Emirates Airways, Etihad Airways, Turkish Airline, Qatar Airways and Singapore Airline), PIA has to overhaul its systems to gather momentum to revert its fortunes.
The only area where it showed consistency is a decline in profitability, bailouts and huge debt pile which put the treasury under pressure along with other loss-making public entities. Some of the fundamental reason for under-performance included nepotism, poor service quality, widespread corruption and failure to build long-term strategic initiatives. The incumbent government expected that by selling its stake, it will be able to revamp PIA by eliminating the corruption and significantly overcoming its poor service quality.
Opposition parties, in particular, PPP has opposed the non- transparent PIA privatization plan at every forum and remained skeptical of PML-N antics over privatization and termed it a controversial mechanism devised to benefit few. Despite the criticism over the timing of this process, the government initially looked adamant to complete such a controversial and apparently lengthy process in short period of time.
The PIA’s counsel presented a 9-year audit record and briefed the court that the national carrier’s shares are being currently traded at Rs 5. Moreover, details of the loss borne by the company were also discussed in today’s proceedings.
The Government gave an impression as it was restructuring rather than privatizing, as the difference emerged between the adviser to Prime Minister on Aviation Sardar Mehtab Abbasi and federal privatization minister Daniyal Aziz over plans of the government. In the end, it was proved that restructuring was a gimmick used to kick-start privatization program.
International Monetary Fund (IMF) has also advised Pakistan to retire its debt on public entities; it must go towards the privatization. PM Shahid Haqqan Abbasi believes that PIA will overcome its losses by 2020 and will become a profitable airline after measure taken by the government.
The government had initiated the process under PIAC Conversion Act 2016 which was adopted unanimously by the parliament, and it was supposed to complete the privatization process by April 15 this year. But, it is yet to start it under pressure from the opposition, but, for how long it can be avoided given the losses which resulted in the accumulation of debt on treasury remains to be seen.